Westinghouse Air Brake Technologies (WAB) 27 Apr 222022 Q1 Earnings call transcript

Good day and welcome to the Wabtec First Quarter 2022 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Kristine Kubacki, Vice President of Investor Relations. Please go ahead.

Thank you, operator. welcome first and call. XXXX everyone morning, to quarter Wabtec's earnings Good Mastalerz. us CEO, Vice and John and are President Santana; Finance, With President Olin; Rafael today CFO, John of Senior release Today's and our slide earlier can Relations the and accessed today with tab presentation, our on website financial were wabteccorp.com. posted along disclosures on on Investor be earnings

business on of the view statements making today. Some best we're are our forward-looking and and our based world

see the more our please For risks, forward-looking and release assumptions uncertainties in to relating disclosures presentation. detailed and earnings our statements

We you turn will consider and carefully and to also discuss I’ll non-GAAP you call the financial reconciliation to metrics encourage these as that, Rafael. disclosures read With over metrics. our tables

good Thanks, morning, everyone. Kristine, and

first our our strategies perspectives progress detailed we business, quarter and Let's financials. value cover against long-term the our my delivered adjusted earnings at our margin was long-term that flow and start move to operations X.X points Investor growth Slide strong on and on on adjusted percentage growth, X, X% expansion John Day shown We significant progress $XXX from of Overall, I’ll the we will framework. operating per in achieved a then the up sales million. with an by XX%. quarter cash Total of March. share as

the the strong a the the impact Overall, team delivered and overcame our despite Ukraine. billion ended conflict of and $X.X year. last environment chain, in multiyear quarter, quarter and supply $XX we with about costs challenges up a Finally, from backlog, from which higher billion was first disruptive across volatile

devastating the situation monitoring We Ukraine. are in

are people the truly there, out inspirational. go and hearts Our courage their to resilience

year. not market account expected Russia for remainder We our X% of for the in to that For the business earnings. our roughly the year, expect of return to we do

our the employees priority by the the of and to Given protect region sanctions. continue is in safety to first abide situation, our all

flows to poised pricing advantage industry of the improving side, the the well Wabtec prices, energy rail. over proposition prices and Rail over higher for medium do from with and believe significant only are benefit term. positive we global from widening fuel that the the likelihood commodity rail is significantly On value truck shifting fuel

utilization in digital enhancing breadth with through our our our continues customer’s decarbonization our safety technologies expertise, order and XXXX and portfolio, increase. investments of to technologies. means and productivity, pipeline We capacity to continues unmatched strengthen, The and deep visibility beyond our are along

quarter company's focus quarter increase our X. Our in future the $XXX our Wabtec's of million of confidence our in dividend purchase first of in XX%. reflected by Shifting first stock and our Slide is to

Let's talk conditions more about in end detail. market

Despite As quarter. we carloads. are progresses. weaker our Locomotive encouraged parkings key slow despite underlying American Many metrics the the key traffic momentum metrics exception in across improve with to the expect our of continue we freight businesses, North at freight to carloads of industry. we improving the decline by are start, as look the year

it we the of increasing about with to comes We North and business to in storage. services expect When of North demand portfolio demand increase American build, pre-COVID and in continue fleet placing below position to believe from efficiency for reliability, railcar are for levels. levels what is storage in fuel XX% trough railcar productivity railcar modernization strength. a Railcars our are the American

quarter XXXX railcars delivered. new across over a of As cars for to result, major continued to for The freight in continue Internationally, markets, the industry strong. is outlook show and first our for pipeline many growth XX,XXX industry improve. order to our orders remains be activity

trends the continue our markets. uneven sector, markets. ridership end in transit to We revenue in growth expect of long-term be the to majority Transitioning various

and globally the efficient invest continue spending drivers governments for clean, safe spot, especially initiatives green rail as transportation. to a positive. long-term passenger remained However, transportation Overall, bright for be market for infrastructure in

quarter, continuing to When initiative making shareholder availability growth X. Indian and comes Next, importantly, let's are framework, strategies. monitoring value, orders, we in our progress several the long-term strategic five anchored it industry most of and expensive This and against wagons of progress to using it and expanding stock. are drive which includes our to the grow streams, online to high-margin scalable In for order key is Slide around locomotives. cycles turn value these technologies improvement exposure base. our the the smart and the and will we rail, fleet system yard and accelerating, installed improve this the part coaches, refresh and global recurring of reduces technologies railway's which strong creation innovative creation decarbonization to is revenue Leading digital Railways including driving largest of first operational India continuous of we rolling automated strategy. This against new economic won of our

generation We Class well Xs hardware fleet-wide upgrade. PTC dispatch won offering, digital with as as next also key a for our orders

We also a locomotive XXX modernizations introduced to Brazil's rail with Norfolk locomotive to Southern, market we've order and Romo, secured strategic with freight deliveries and MRS a model for new Suzano.

XXXX efficiencies integration Finally, these expect our we to restructuring outlined financial our program to we that, and to With our million overall as which, growth. recent position. we of $XX Investor for review the deliver performance and rationalization turn operations. to position segment continued well run Day, Through John quarter manufacturing savings and drive I'll the at as between continued call Wabtec launched million by John? X.X as across footprint efforts, $XX engineering will rate additional our over

everyone. morning, Thanks, Rafael and good

of sales the results in the year-over-year chain review in the lower our by good despite reflects challenges by Turning higher freight of recovery partially cost performance, positively broad disruptions. We another financial year. impact to driven and Nordco, for in foreign Sales chain, in offset prior quarter $X.XX more and transit, the were increases acquisition exchange and Sales Russia. supply Slide first segment, the will first increase pricing billion, a supply operational quarter detail. versus by had which quarter the X. unfavorable X.X% continued our I impacted and of currency were

due to component parts, impacts in results to chips, sales both caused many segments We experience which delays our delivery. customer across continue adverse and including computer shortages production in to

highly quarter, versus prior adjusted was higher offset costs, million were Margins up face million, by by In and and favorability, share income of the up The $X.XX, GAAP per costs. XX.X% earnings year. quarter, margin quarter fixed delivered and mix to earnings $XX a million by higher $XX points disrupted of of a pricing operating per up the productivity, adjusted first prior margin first diluted manufacturing strong diluted expansion, $X.XX partially improved We an chain basis. For expansion year was $XXX which XX% absorption even versus versus percentage adjusted in driven which inflationary the environment. XX.X% up on were a supply team ago. X.X were was the aided achieved year. share increased challenging

the charges $XX savings onetime During of integrate rate to other charges, to Wabtec restructuring related integration million we quarter, by initiative $XX operations had X.X further for of and largely $X our million to million run XXXX. drive and to

in we face and to work are in challenges. the unfavorable results, noted, with these growth growth the remain continued and of disruptions minimize diligent our of increases. our sales margin As chain cost face currency supply QX proactive Rafael exchange as We and particularly our pleased and

X. Slide Turning to

product our in lines review more detail. Let's

driven last Freight X.X% transit in by sales sales segment, First offset quarter up segment consolidated versus partially higher were lower year, by sales. the

Component reliability and grew sales and fleet due fleets. as for recovery customer build, availability were lower by of for unparking momentum year-over-year the were continued driven industrial services from Equipment of supply business. The to with and improving OE strengthening look continued modernizations, increase predictable performance, to by sales XX.X% sales X.X% the an our continued sales outlook year-over-year outcomes sales. remain storage Nordco. in component driven higher continues number foreign improving The acquisition railcars In quarter the and versus was to markets. locomotives X year. mining our largely our our drive disruptions. XX.X% line a First percentage in rail, trends adversely across from higher impacted last superior were sales increasingly year-over-year, railroads demand, exchange of encouraged up We up currency of of by in points build and strong railcar end

Nordco, were Digital sales quarter of XX.X%. ongoing by primarily Electronics driven the year, prior for up Excluding shortages first versus sales organic declined chips. X.X%

of low-margin continue due year and UK versus Transit on to improved of for exit we utilization opportunities continues electronics chain to sales foreign more capacity pipeline improved digital issues, segment, year our to in onboard see globally as and backlog productivity, We demand our see locomotive exchange. safety. down $XXX X.X% and customers versus negative increased lapping in the the decreased digital of even line products, focus currency product prior million. impacts to significant continue Sales a to And our supply contracts importantly, were Across last increase.

Foreign by for exchange continue. initiatives impacted the alone positive long-term points. segment currency We adversely outlook believe for this green percentage and infrastructure X.X as medium spending revenues remain

Moving to X. Slide

Mix driven freight gross unfavorable margin currency by percentage sales. manufacturing costs margins. product and adjusted transit benefited positively points outpaced higher Our mix, margins and expanded material Mix exchange. X.X by and as pricing favorable XX.X%, costs, foreign raw to offset our our impacted sales pricing increased partially

costs. actions copper our long-term implemented costs material Raw aluminum, that higher escalations many were metal other up pricing led costs. from increased of higher realized dramatically with was significantly, price Additionally, by and incorporated steel, recover including into price costs, along increased fuel were again to contracts,

by gross impacted currency adversely revenues Foreign $XX by impacted quarter first X.X% million. adversely exchange and profits

supply to the last estimated of to chain by $XX year's higher global impacted were logistics to first absorption million higher by of continue aggregate, transportation than be significantly higher are be $XX Finally, and transportation quarter. average. container continuing In fixed year's manufacturing costs the million materials, labor offset costs. positively last effects costs costs, higher favorable and disruptions, Current than partially exponentially costs

these team and mitigate pressures implementing cost continues price to triggering productivity well operational execute initiatives. driving to and escalation, the price by of lean surcharges impact Our

to Turning XX. Slide

quarter, X.X points margin adjusted operating first expanded the last percentage year. For versus

by gross to plan. were investment offset acquisition partially benefited from in Engineering which part, $XXX future from in margins up increased to adjusted Our million was year million, expense of the Adjusted year the was last expenses higher technologies. but prior increased engineering Nordco. from due from higher according SG&A $XX.X margin,

and improve investing leader resources utilization our engineering capacity industry our to decarbonization and opportunities, our but digital technologies importantly, customers' invest more in in an the business current and future safety. continue as productivity, We that

a starting Freight take XX, look segment Slide let's results segment. Now on at with the

higher As improved segment pricing of input benefits costs. The quarter percentage higher for margin significantly adjusted $XXX adjusted and operating points increased and up an I prior improved XX.X%, discussed, sales, of the income year. partially for segment X.X was already million the Freight sales offset versus were by mix

up first Finally, segment billion, quarter end year the order momentum due last Rafael earlier. to backlog $XX.XX of was multiyear the billion $X.XX discussed that broad from the

largely implementing currency by foreign volatile unfavorable pricing the XX. lean Slide SG&A Increased driving adjusted operating income the of X.X%, efficiencies currency were were environment. Adjusted team improving on supply and the million in foreign to prior million, negative up Transit resulted the segment percentage the lower $X significant despite offset focus by of continue operational down down and increases performance in by to a driven effects chain Turning costs, as points segment, segment versus exchange. which $XX operating strong exchange X.X year-over-year to disruptions. sales we operational Across and and delivered margin XX.X%, input year. decreased costs

Finally, Adjusting been Transit for exchange, year was versus the foreign the billion, a segment $X.XX currency roughly effect slightly ago. backlog have of negative up X.X%. for up backlog would quarter

financial to Slide position turn our let's XX. on Now

operating flow During the quarter, generated cash conversion of a of in million cash resulting XX%. we $XXX

below by rate quarter cash compounded of Our Cash target the over proactively inventories growth was lowest our in being parts. year been QX the has the of half QX, flow in ahead building historically critical back supply year of disruption our conversion strong this managing was XX%. of full for expectations this and

payment. incentives short-term in XXXX higher expected, QX as of was COVID of the impacted QX the versus payment 'XX Additionally, considerably

flow we confident for are strong we will generate forward, Looking the cash year.

of more end net XX% million and ratio robust and our of adjusted cash million additional our the prior quarter first shares dividends to dividend $X.XX of rate. at at an X.Xx Our Also the the $XXX paid returned up liquidity during repurchasing versus billion. to and we which was year shareholders, the leverage is $XX declined quarter,

value. position With us opportunities financial call highest we see confident can we shareholder toward return grow results, you to and can turn As in the our continue are that, to these to and to flexibility drive the cash and to is the solid generation, strong, Rafael. I'd liquidity capital allocate back that giving like

Thanks, John.

up XX the of Last financial X% with Slide our growth discuss of XX% at or and to $X.XX guidance. at to sales we quarter, EPS XXXX guidance midpoint. to roughly flip issued Let's midpoint $X.XX the

Our and drive a industry to overtime. to underlying strong in margin demand guidance grow with was on mix our products. are disruptions, improving cost action investments and Despite customer unfavorable business technology, environment and we momentum supply take higher from headwinds for still expansion based our continuing chain challenging

With quarter $X.XX business about business in plan. feel per the strong and resilience despite business in found importantly, our was the an I'm environment. top proud in against our and XXXX, our planned end with reality and ever-changing to pressures despite our unplanned that of loss first is which share pleased more expected The extremely range. we us, our teams of the businesses about strength behind to earn guidance original our that, Russia. Russia of the to delivered I'm financials, challenging deliver path and our

beyond, pressure are this and original the volatile XXXX conditions the despite recognizing still the and not impacting we market the However, our in strong changing of and business, opportunities guidance. underlying pipeline execution,

turn next to slide. let's Now the

results evolving a strong of our strong start to environment. for rapidly challenging financial drive the financial efforts position. delivered customers, a and our team to very year strengthen despite further Our deliver I'm and their proud

and are look and sector we world's solve forward, positioned and rail logistics, the As issues et share increase facing to the cetera. the freight critical Wabtec well

of our to and company the to continue growth. profitable in industry fundamentals lean drive long-term the strong will We

industry be continues by initiatives allocation. lean, to customers. our our and Our on continue long-term grounded value in culture capital drive efforts expertise, scalable to disciplined strategy deep be innovation, improvement continuous our built breakthrough accelerated will that technologies for These and

and I'll will before, said company sustainable Kristine With confident deliver improve move world. Q&A future. a of mission Wabtec's lead the continue I purpose holds our we've call discussion. the to the to transition that back over that, to and more am As the larger a this to begin to Kristine? turn portion

you, Rafael. Thank

We will now Operator, question. our now Instructions] first move on [Operator are for to we questions. ready

first Instructions] Long go ahead. will Stephens. question come Justin Please with [Operator Our from

$X.XX the Rafael, of guidance guidance, mentioned original year. maybe full on So start to the was for you that Russia the

Just unchanged, so, on that positive you are offsets talk to with Russia? X? now that And about if you be in the guidance assuming range the to clear headwind that, number can is what are

Yes.

So that's right.

for year the this We at are X considering it's point.

well. offsets really first, think quarter. I'll with I the start the Justin, first think is the I We're well, operating tied to business --

Our seen coming business. with services teams execution. also have of done strong the positive unparking demand on from the We've locomotives

We that have stronger a anticipated. seen we business now also mining have

Russia, chain, of find year, of to you in think if well. to it's to and the the business offsets, think about just costs not work as I So, the loss continuing but tied supply headwinds inflation transportation

first the to with think behind offsets. continues I those on think I quarter the work us, team

talked opportunities have certainly the about is, we add would I in of maintaining have market we at of increased volatile that this think point. the in And stronger uncertainly probably since But despite I conditions, really a thing felt pipeline strong other February. guidance The business. we last

locomotive you're up any And are your contract not international And the the new at on? point the on up have Great. points perspective? just in can maybe data share in that you on locomotives, an only Okay. to pipeline, also but in today that XXXX, bidding do this you XXXX, from international will say are market enough there wins following on be in specifically deliveries already backlog

Number gains this through it's momentum locomotives fundamentally actually as delivered being the what one, year. far need that have we for again we started year. Justin. new And Yes, backlog as

at going of second delivering more the you year, the half than second year XX% on be actually did the the If look locomotives to we half. we're more than in before

So, point. I data think one that's

I the really think quarter. backlog. was what more in positive exciting a quarter the about again was was the It

growing the backlog, continues the to here be is order intake again. commercial over deals the in probably our And converting has years. pipeline momentum last of deals see five we've strongest this this pipeline focused of team And we pipeline. think and I strengthened the on had

the think the in And since This progress the had of also saw that's with reflected backlog. I is announced The for highest both is certainly freight the we strength some things you that quarter. on the here first we've merger. and transit. XX-month

and So, I of momentum think certainly beyond. described some the I to good there's there 'XX, I and 'XX things think think, I you helped,

So continue build multiyear to to momentum. orders that us really help

very something signed we the in is quarter. that So positive

Our next Sachs. ahead. from go question will with Jerry Goldman come Please Revich

like the look seen and your just just mod years mods of the Rafael, deliveries year-over-year us recent the what's in in of like on been Can in interesting what that market strength in you've the business update your mods And Mod year order over growth look Thanks. you we've had the has developments over the strong first quarter? for the light cadence balance specifically? share.

So double-digit the year Mods terms I is variation at relative time across I in more of have think year, mentioned you before but last growth. business. could that look a exciting growth But what's think think auto year on costs. Jerry, I I we of the When shipment, into versus this is just had there double-digit consistency

thought cap here a continues. the I in volume in And America, think to that that have what business. been opportunity would terms momentum of of we North think further I see some we internationally, expand the

see to continue we with grow a that so here forward. opportunity business to And moving strong

When the moving to you you revenue the the you spoke that can course year? about about over expect talk the earlier? burn earnings pieces given cadence And accelerate then of do the

and and terms in but earnings And little revenue the cadence, be the the would first growth, going the we gain earnings half. of a growth. - to talked reverse lighter about, to John. the Jerry, heavier in momentum as of Hi is just equipment last to big came and our quarter grows And expected half bit difference what this half. back we regards is between that Rafael it's talked terms back the With two in about, out through

of in what margin growth the a overall seeing X.X% points. had in we're that first we I think percentage very is quarter revenue growth sequence. of and And much line with X.X

see to we we expect As significant look half, growth. back to revenue would the a

is, the going sorry, the is percentage shipping driven, I'm is Rafael overall one things: second what first a mix points; comps growth to basis the back than That's cost -- of of a tougher were the in on QX easier comps by by percentage a is margin pressure mentioned we'd because back our because expect happened in and the the about higher year-over-year most recent sales; three half be However, basis. shift year-over-year as well, Jerry, half the half lower it surge that much in with in cost is on of more equipment of the other Ukraine. in X.X invasion

Our from Wolfe next will Please question with go come ahead. Research. Scott Group

Yi Yes, Scott on Group. good Ivan This for morning. is

understand multiyear year, your this treating Russia, expecting Thanks. backlog? are exposure I in on but Russia you for First how you're X this

So, with regards to, number with we and requirements. complying all one, the business in legal are Russia, sanctions

extent, again, safe this in the support for the we We to say some region. And committed, of providing purpose. to have are equipment nominal operations

have the Given backlog. removed Russia our from conflict we uncertainty, the given

expectations Thank quarter? Thank or XQ? in And percentage you follow-up, your my locomotive parkings are for the can what you. of you. And second on quantify number

to parking. tell we of numbers back that to comparable are third continue We're you quarter see I'll the on What to XXXX. there is

a that's, positive business. good the a think, I for So -

a and I importantly, of fluidity, for most level parked improve demand are But and think the network, our you investment they've on those customers they think at order to bit really continue investments. of look Some power when and some been demands reliable for metrics. time, continued of the the in those fleets to velocity the quite for part, I

I for I of lot certainly think that's the have, something that we it. think, a solutions

ahead. Yakavonis with Stanley. come Please Morgan go question next Our will Courtney from

just belabor but hate couple to Russia, I follow-ups. of quick a

Analyst the that from I impact mentioned the Russia. at to XQ Day think majority supposed you was hit the had of

from that the from headwind? impacted comment you confirm that if to year I majority I will transit that, the less And all you exposure. rest you secondly, of just versus wanted freight backlog. be or removed also had so and just mentioned on the then think Russia that And So could the at

So to backlogs? just - segment to those any the impact level

quarter, what we we earnings basis, that, be we not in little had Investor bit majority this began, Hi backlog the conflict in a split is, had full during out for first terms in probably, $X.XX but bit overweighted Courtney, across piece took talked this planned did of just is the $X.XX quarter. $X.XX. shared the Day in we On an a first of the is versus other quarters. would yes, about our was In shipped John. quarter. that the would be we the older quarter little of first quarter a the the we or it and all before Russia out - We say And is year earnings even Courtney, expectations.

was on a think I that expecting. And then share bit just higher we than were little repurchases,

had you it's done. announced had million a now reauthorization think that to you close I and halfway $XXX

maintaining So guidance as if the just in any rest offset pace we you guidance? of as well about to was the for that? And year give the key a can that the think

to the We XXX trough a it's we believe to That largely we're the back. good have the feel maintaining we in pleased purchased $XXX XXXX. to and repurchase of Courtney, what was is million out And a start the offset key off to year, in want million. get but future. to to guidance, confident able came not shares. We we're going And very

invest capital to sure sheet. balance of I and making in at which going spend, We that forward, look business a Day on had terms with capital to I we what would think focus I'll that technology as continue in we as back the you go from long dividend barring in said to the are we saw we would have we allocation. Investor that prioritize to dividend. regards As share the cash, the and Then share form And they are the of finally, strategic excess repurchases. over prioritize protecting to first accretive and repurchases. and and come any quarter shareholders back in our acquisitions there, strong

Our from Wetherbee Citi. will go next question with Please come Chris ahead.

Eli start XXXX OEM quarter than supply congestion saw can on what we that the higher of for the were some side. chain prior growth and with XXXX. the Winski given in is Chris. in Could and you segment We like quarters of this the talk some This the revenues might that Maybe the in about look of cadence issues there.

Are you segment? referring transit to the

I am.

Right. revenues percentage is What seeing down that as to far as - we're mentioned, as were of had and is X.X% transit overall we points X.X due currency.

well, from drag other is first we about the we ago, as revenue time higher a our revenues our And on lot about about an year exited quarter. year product impact had the a that had right aftermarket, The was with a lapping end roughly side, that we're was those service regards that brush and line. ago now, basically transit By the the that quarter, exit same so operations of third business, our not UK the we to business. that's exited on currency it we - of business that

in to good have others. element, But supply the than disruptions The seen transit business hit we growth underlying that those, bit little business. would a is obviously continue more third the excluding

that of synergies coming probably start that more of and business It's now out maybe Nordco. the of of that then up the the and some likely are acquisition? jumping you with should the first fade to the How acquisition from some correct? now - here to off quarter, expenses And be that seeing services is how

Right.

out cost that. I to margin we a expect. we will $XX duplicate acquisition. couple you'd of with And as quarter, that efficiencies years, as see be that's in lot certainly hit last and quarter mean with the that, that are next would over This as business coming expenses of did of the During the SG&A lapping operational the tracking take looked we're million in acquisition, we that had out out higher as gross well. SG&A well are coming that of

Rob question Please Research. next ahead. come from Melius Our will with Wertheimer go

long had, transit, short I one two I So term. guess, and on one

progressing any Just comments well. it on been term, uncertainty just focus I is customer the a more narrowed on transit, as sentiment up. then But how is competitive wins, the years on that But just out? over stop. you've if short-term demand anything, it's just structural question feeling just the backlog around stuff that pent is Europe, has short just the like picture pretty perhaps backlog? And on what on on on any Thanks. delayed in And on seems transit will affects balance second, share -- market and playing comments

of intensity to And Yes. -- even well, cars either is I'd trucking extent, there. across market. think crisis markets were freight of We're segment. to energy if various slowdown I to any say, passenger rail of ridership a to fraction or you continue the be the the trends of compare seeing uneven not signs some to current the rail favors into

work trains. I parts the increase demand intercity for think is of other Europe, certainly but the element other model I'd hybrid mention may the also world,

a with positive governments infrastructure to be So spending rail. investing in on one continues side,

auto see the to the due strong, continue of supply We in disruptions. you in business you'll from OEMs chain might could see to customers short same, heard fundamentals that So, project term. remain remain in sector. some the have consistent execution and of that But what delay largely, the

on any market is shares holding, line, comments contracting? balance if in then And your growing, growing just backlog competitive

line varies holding of share positions. course, It, been by have we think largely line. product I market product

the those in comes down backlog, making that over to improved direction. last really a that of which X we think working clear made and also the couple has choices was working of I upfront of years. the things towards quality the some And of

we're to numbers. continuing those So, improve

from [Operator Poliniak Wells Instructions] next Allison Fargo. go question will ahead. Our with come Please

inventory Obviously, there? you shortage there those as But electronics. still. way shortage any has Is Just Just certainly that volatile chain headwind that quantify go start ease, to want building any is supply chip there. digital do your electronics? what we growth can look the through, to a help? growth color to to digital then you obviously, for impacting And to expect environment been are

Yes.

So things. Allison, two

some computer made have that of some lack we've year. think still business grow. business the terms of the chips of I this, trying We but had decisions year in while in significant last expect to impact anticipate for the a

some signs you last are of tied saw double-digit the to growth good year. order think the I

again saw were really business. book-to-bill above was Some agreements for multiyear first the quarter, in the we which strong two a

to make the would And additional I is other our momentum But some to think continues despite continue North with drive be to focus here announcements the comment, I think, into with a continuing we're teams sure gain make orders. that May. we again, area of slow, America for convertibility of internationally. to XXXX I

there's adoption some we other that and I tied significant PTC some of have. think technologies the to internationally opportunities

then a question. And high-level just

there. real of masked point? just the is this in we and color mass local challenges, seeing? at why a often pushbacks those we're the just number perspective, this like a behind this Just any does One with that's seeing that in by coming Is what's your it's thoughts going there get on? feel high-level demand surge or from what being being you're storage for any numbers. any Or service temporary railcars the parking improvements the like rail

Yes.

it's Let and me broad, the North market. we're saying, and what this is start with than more American

commodities about tied freight think we our demand to see think across key geographies, are you really If flow. internationally, I

dynamics So volume positive. are think about

that shared we Kazakhstan at India. in some both the If of you and data look

equipment we in Africa. I be delivered to for new think inquiries have

and concessions. in as the trends projects discussion Australia, long mid, number to in say are a Asia volume tied Brazil, Even a of term under the function in have of of you well as drop new saw positive despite that. I'd We

North America. mentioned You

I that the the locomotives see needing reliable of freight described. is think power we improve the both terms I will efficient improvement of think expect to in the of things expectation we unparking cars to sequential that And year. some to there throughout and Carlyle continue of investment through certainly we continue and solve customers

part. So that's maybe just with regards that to

really the think momentum again, regards the some that North this I to made I we I growing and think the is into the quarter, some think of than of But made backlog. the that around in transit. comments saw with comments America on goes broader I I've

go Matt from Cowen. come will ahead. question Elkott with next Our Please

Good GE as you the us are an locomotives diesel how And I orders in in been have you Wabtec remind North on going legacy us actually locomotives? range. around content the FLXdrive, content see also morning. you. versus content average on you on it suppliers? again, from FLXdrive North Thank freight component opportunity the is the outside update there much the prior to America, Can relates of America think once can locomotives, where to might then Rafael, give in $XXX,XXX

Yes.

of I'll we for So new of which the customer. value suite translate opportunities the with as the and products ultimately the bring a FLXdrive, really think I for being full integration have to product start that data provides us to

significant number very a think word have use products. there. expanding opportunity our we the So, that call going of legacy to about, I'll -- When you I'm

international have We the to markets. We've that in doing the grow been opportunity well. as that

at here, a on comes behind will on call of the service And the it see highlighted momentum that ultimately grow we've right dependent introduce continue the some be that is in seen that you've with, terms fleets customers it but sure going for you from to to and of you'll looking some these opportunities, business? making which in reflected I'll of support orders really sizes scale, numbers with comes as components, are it. capability - of digital Some and that of

consolidation then And on question other one front. the

per bolt-on to you three the before back we one I give to kind And expect pace eventually? think Should of GE, can that yourself ease or guys two year. rate into you was acquisitions on or targets you're Just the potential opportunities anything potential the M&A consolidation on would helpful? right pool be that Is an eyeing us examining? of front there front you're any now? a update

we're say to come continuing investments. with going I'd to the here. got returns right to We're on explore It's be acquisitions. opportunistic

shared acquisitions not creation with capital this really Day. that about we during guys is the we This do. consistent that number with Investor allocation about the is you So. really and framework value of very

it's we M&A got many, Right. they which not Matt, how on are? the And the the And think we've very again, MASU I this Nordco, Vision they process or a I activity. at opportunities. accretive how three of are is strategy robust time we one our year that great certainly the to looking think it's example quality, a just and at how a year. more about ago drive did we end at through of can with and value Beena one the recently, had

to So, we feel accretive very as it company our for And pipeline do good well about certainly priority a the where we're look at, M&A transactions. as to as we is continue forward.

is evaluating freight the safe Is to when comes assume priority to it M&A? it that

good to was deals the can find beyond we what owner the accretive grow able drive company. overall for previous think is priority to quality, the do I to value that

Kristine concludes This to for closing Kubacki to I would conference the our any remarks. session. turn back like over question-and-answer

we your I'd and look like you with Goodbye. to participation today next Thank speaking you. forward quarter. to thank for everybody

has now attending conference you for today's The Thank concluded. presentation.

You disconnect. may now